Though Tax Day happens every year, it still seems to take many Americans by surprise. This year, don’t miss the deadline or let this crucial to-do loom large over your head.
To have a smooth tax season, consider the following:
Gather your records
Before you file, make sure to gather all of your important tax documents. This includes receipts, canceled checks and other records that support income, deductions or tax credits that you claim.
Get started early
If you can, get a head start on your taxes. Filing early is a good tactic for anyone, but particularly those with evolving or complex financial circumstances. Not only will doing so help you prevent the anxiety that comes with procrastination, but you will also receive your refund early — if you’re due one — or give yourself time to prepare to pay any owed taxes.
Do your research
The list of what is tax deductible is more extensive than you might realize, so do your research. Keeping good records throughout the year of your expenditures can help you take advantage of these opportunities.
Max out your retirement plan contributions
If you haven’t already maxed out your retirement plan, do so before you fil or by April 15. This can help reduces your taxable income and the amount you may owe. The current maximum 401(k) contribution is $18,500, or $24,500 if you are age 50 or over. If you can’t contribute the full amount, try to match your employer contributions. Depending on the amount, contributions can save you thousands in tax debt.
Have a refund plan
Don’t just let your checking account absorb your tax refund only to spend it on an impulse buy. Whether you invest the money in your retirement, sock it safely away for a rainy day or put it towards the purchase of a big-ticket item, such as the down payment of a house, having a plan for your tax refund can help you make the most of the money.
This year, have a fuss-free tax season. With a little planning, you can file your taxes efficiently, without the headache and at the greatest benefit to your finances.
— Information provided by StatePoint